Rising Memory Chip Prices May Cut Global
Rising Memory Chip Prices are expected to put strong pressure on the global smartphone market in 2026. According to the latest forecast from TrendForce, worldwide smartphone shipments could decline by 10% this year. This drop would bring total shipments down to approximately 1.135 billion units, marking a significant slowdown compared to previous growth trends. The forecast highlights how component costs can directly influence global production volumes.
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In contrast, 2025 ended on a relatively positive note. Global smartphone shipments grew by 2% year over year, reaching between 1.24 billion and 1.26 billion units. However, the current surge in memory component costs has changed market expectations for 2026. Key projections include:
- 10% expected decline in global shipments
- Estimated 1.135 billion units in 2026
- 2% growth recorded in 2025
- 1.24–1.26 billion units shipped in 2025
The comparison below shows the difference between recent performance and upcoming projections:
Year | Shipment Growth | Total Shipments
2025 | 2% Increase | 1.24–1.26 Billion Units
2026 | 10% Decline (Projected) | 1.135 Billion Units
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Bear-Case Scenario Under Rising Memory Chip Prices
TrendForce also presented a more severe possibility linked to Rising Memory Chip Prices. In this bear-case scenario, global smartphone shipments could fall by as much as 15% in 2026. If that happens, total annual shipments would decline further to around 1.061 billion units. This scenario reflects the risk of sustained cost increases and weaker market demand.
Such a sharp decline would significantly impact production strategies and supply chains worldwide. Smartphone makers may reduce output to control financial losses caused by higher component costs. The bear-case forecast includes:
- Up to 15% potential drop in shipments
- 1.061 billion units under worst-case estimate
- Reduced manufacturing volumes
- Increased supply chain pressure
These projections show how sensitive the smartphone industry is to changes in memory pricing trends.
Rising Memory Chip Prices and Higher Smartphone Selling Prices
Regardless of whether the decline reaches 10% or 15%, Rising Memory Chip Prices are expected to push smartphone selling prices higher in 2026. Memory components historically made up about 10% to 15% of a smartphone’s bill of materials. However, this share has now increased dramatically to an estimated 30% to 40%, reflecting the rapid rise in memory costs.
As memory becomes a larger portion of overall production expenses, manufacturers may pass part of the cost burden to consumers. This shift could reduce production volumes for some brands, especially those operating with tight profit margins. The impact of memory cost increases includes:
- Memory share rising from 10–15% to 30–40%
- Increased average selling prices in 2026
- Reduced production for some manufacturers
- Greater cost burden across supply chains
Cost Component | Previous Share | Current Estimated Share
Memory Components | 10%–15% | 30%–40%
Other Components | 85%–90% | 60%–70%
This shift clearly shows how Rising Memory Chip Prices are reshaping production economics in the smartphone sector.
Brand-Level Impact of Rising Memory Chip Prices
The effect of Rising Memory Chip Prices will not be the same for every smartphone brand. Samsung may be in a stronger position because of its vertical integration and its role as a major supplier of memory components. This structure allows the company to manage cost fluctuations more effectively than competitors that rely entirely on external suppliers.
Apple could also be relatively insulated from major damage. Its customer base has historically shown greater tolerance for price increases, which may help offset higher production costs. In contrast, many Chinese manufacturers are expected to face stronger pressure. The impact on brands includes:
- Samsung benefiting from vertical integration
- Apple supported by loyal premium customers
- Chinese brands facing higher cost sensitivity
- Xiaomi more vulnerable due to focus on entry-level devices
Brands that depend heavily on price-sensitive consumers may struggle the most, particularly in emerging markets.
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Budget Smartphones May Face Greater Pressure
Rising Memory Chip Prices are expected to hit budget smartphones more severely than premium models. Entry-level devices operate on thinner profit margins, making it harder for manufacturers to absorb additional component costs. As a result, brands may either increase prices or reduce production of low-margin devices.
Consumers who typically purchase affordable smartphones may delay upgrades if prices rise significantly. This could further weaken shipment numbers in 2026. The likely outcomes for the budget segment include:
- Higher retail prices for entry-level phones
- Reduced production of low-margin models
- Slower upgrade cycles among price-sensitive users
- Increased competition in the mid-range category
The combined effect of rising costs and cautious consumer spending could reshape the competitive landscape of the global smartphone market.
Conclusion
Rising Memory Chip Prices are expected to play a decisive role in shaping the smartphone industry in 2026. With a projected 10% decline in shipments and the possibility of a 15% drop under a bear-case scenario, the market faces significant uncertainty. Increased memory costs are also pushing smartphone selling prices higher and reducing production flexibility.
While some companies like Samsung and Apple may manage the situation more effectively, budget-focused brands could face greater challenges. The evolving cost structure highlights how critical memory components have become in determining both pricing strategies and global shipment volumes.
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FAQs
What is the expected decline in smartphone shipments in 2026?
TrendForce projects a 10% decline, bringing total shipments to around 1.135 billion units.
What is the bear-case scenario for 2026 shipments?
In the worst-case scenario, shipments could drop by 15% to approximately 1.061 billion units.
How have memory component costs changed?
Memory previously accounted for 10–15% of a smartphone’s cost but has now increased to 30–40%.
Will smartphone prices increase in 2026?
Yes, average smartphone selling prices are expected to rise due to higher memory costs.
Which brands may face the most pressure?
Brands focused on entry-level devices, especially Chinese manufacturers like Xiaomi, may be more vulnerable to cost increases.